‘Hong Kong back in business’ and will benefit from China’s post-Covid growth, Standard Chartered chair Jose Vinals says
- Jose Vinals hosted the lender’s board meeting for the first time in three years in Hong Kong last week
- Standard Chartered’s chairman does not believe the current banking turmoil in the US and Europe will turn into a global crisis
Vinals, who visited the city for the first time since the pandemic, hosted the lender’s board meeting last week, its first in three years in Hong Kong.
“The board is delighted to be back in Hong Kong,” he said in a media briefing on Thursday. “It is a very positive visit. Seeing is believing. There is nothing like being here in order to reconfirm everything we had heard.”
Vinals declined to disclose the board meeting’s agenda, but said the board has been, and will continue to, work with the bank’s key stakeholders in the city.
London-based Standard Chartered is an emerging-markets focused lender. Out of the more than 100 markets it operates in, Hong Kong is its most profitable market.
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Vinals pointed out Hong Kong will benefit from China’s economic recovery following the border reopening, with Standard Chartered expecting the country to post 5.8 per cent economic growth this year.
Hong Kong will also benefit from the rising internationalisation of the yuan, as well as the growing trend of Chinese and Middle Eastern investors using Hong Kong to invest their wealth, he said.
The Hong Kong government on Friday announced eight measures to attract wealthy families to set up operations in the city to manage their wealth, philanthropy and art collections. Last month, the city’s leader John Lee Ka-chiu led a delegation to the Middle East to attract investments.
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Standard Chartered last year committed to invest an additional US$300 million in China in the next couple of years.
Even amid challenges last year, Standard Chartered’s onshore income in China rose 10 per cent year on year. Offshore income, which was generated out of China for the rest of the group, jumped by 21 per cent, Vinals said.
“You can only imagine that [growth] as China’s economy now sort of reopens and gathers speed,” Vinals said, reiterating the bank’s aim to double its onshore and offshore profit from its China-related business by 2024.
Asked whether the banking crisis in the US and Europe will turn into a global financial crisis similar to 2008, Vinals said that while the situation warrants close monitoring, he was reasonably confident that it will not get out of hand.
Before he was appointed Standard Chartered’s chairman in 2016, Vinals held some important positions at the International Monetary Fund and was the IMF’s chief spokesman on financial matters, including global financial stability.
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He pointed out the many reforms that were put in place, during and after the global financial crisis in 2008, have strengthened the structure of the global banking sector to maintain global financial stability.
Three midsize US banks, including Silicon Valley Bank, collapsed over the past month, unleashing market turmoil that spilled over to Europe, forcing the sale of Credit Suisse to UBS last weekend.
“This does not have the dimension of what we had in the global financial crisis, by far. This is an episode which is limited,” Vinals said, adding that the crisis has not affected Standard Chartered.
“We are very resilient, we have a very diversified book of credit,” he said. “We continue executing our strategy and we are not disrupted by these market turmoil. So I would say, monitor the situation carefully, but keep calm and carry on.”
